Human Resource Management 13th Edition Chapter 13 Internal Employee Relations Copyright © 2014 Pearson Education, Inc 13-1 Learning Objectives • Describe the importance of worker retention and define internal employee relations • Explain the concept of employment at will • Explain discipline and disciplinary action • Describe the disciplinary action process, discuss the various approaches to disciplinary action, and describe the problems in the administration of disciplinary action • Explain the need for emotional intelligence in conducting disciplinary action Copyright © 2014 Pearson Education, Inc 13-2 Learning Objectives (Cont.) • Describe terminations, explain termination of employees at various levels, and explain demotion as an alternative to termination • Describe downsizing and explain the use of ombudspersons and alternative dispute resolution • Describe transfers, promotions, resignations, and retirements as factors involved in internal employee relations • Explain problems with conducting disciplinary action in the global environment Copyright © 2014 Pearson Education, Inc 13-3 HRM in Action: Worker Retention • During recession, it is easy to forget that talent retention is critical • Company must have ongoing strategy to retain valued employees • Virtually every topic in text can be viewed in some manner as being part of retention strategy • Provide means of preventing person from seeking job with competitor and remaining with firm Copyright © 2014 Pearson Education, Inc 13-4 Internal Employees Relations Defined Human resource activities associated with movement of employees within firm after they become organizational members Copyright © 2014 Pearson Education, Inc 13-5 Internal Employee Relations Activities • • • • • • • • Discipline Termination Downsizing Demotion Transfer Promotion Resignation Retirement Copyright © 2014 Pearson Education, Inc 13-6 Employment at Will • Unwritten contract created when employee agrees to work for employer • No agreement as to how long parties expect employment to last • Approximately of every U.S workers depend almost entirely on continued goodwill of employer Copyright © 2014 Pearson Education, Inc 13-7 Not Included • Individuals with a contract for a specified time period • Those with collective bargaining agreements • Those with annual contracts (i.e., teachers) • Whistleblowers Copyright © 2014 Pearson Education, Inc 13-8 Exceptions to Employment-at-Will Doctrine • Prohibiting terminations in violation of public policy • Permitting employees to bring claims based on representations made in employment handbooks • Permitting claims based on commonlaw doctrine of good faith and fair dealing Copyright © 2014 Pearson Education, Inc 13-9 How Employers Can Protect Themselves • No statements suggesting job security or permanent employment • No statements during job interviews that suggest a promise, such as, “You can expect to hold this job as long as you want” • No hiring without a signed acknowledgment of at-will disclaimer Copyright © 2014 Pearson Education, Inc 13-10 Ombudsperson • Complaint officer with access to top management • Hears employee complaints, investigates, and recommends appropriate action • Impartial, neutral counselor who gives employees confidential advice • Typically independent of line management and reports near or at top of organization Copyright © 2014 Pearson Education, Inc 13-36 Alternative Dispute Resolution • Procedure where employee and company agree problems will be addressed by agreed upon means ahead of time • Includes arbitration, mediation, mini-trials, and ombudspersons • Uses range from racial, gender, and age discrimination to unfair firings Copyright © 2014 Pearson Education, Inc 13-37 Alternative Dispute Resolution (Cont.) • Presidential EO requires federal agencies to: Promote greater use of mediation, arbitration, early neutral evaluation, agency ombudspersons, and other alternative dispute resolution techniques Promote greater use of negotiated rulemaking • Circuit City v Adams: Supreme Court ruling greatly enhanced employer’s ability to enforce compulsory alternative dispute resolution agreements Copyright © 2014 Pearson Education, Inc 13-38 Transfers • Lateral movements of workers within organization • Should not imply that person is being either promoted or demoted Copyright © 2014 Pearson Education, Inc 13-39 Transfers Serve Several Purposes • Necessary to reorganize • Make positions available in primary promotion channels • Satisfy employees’ personal desires • Deal with personality clashes • Provide wide variety of experiences necessary before achieving promotion Copyright © 2014 Pearson Education, Inc 13-40 Promotion • Movement to higher level in company • One of the most emotionally charged words in human resource management Copyright © 2014 Pearson Education, Inc 13-41 Resignation • Certain amount of turnover is healthy • Most qualified employees are often the ones who resign Copyright © 2014 Pearson Education, Inc 13-42 Analyzing Voluntary Resignations • Exit interview: Means of revealing real reasons employees leave jobs; conducted before employee departs company • Post-exit questionnaire: Sent to former employees several weeks after leaving organization to determine real reason employee left Copyright © 2014 Pearson Education, Inc 13-43 Attitude Surveys: Means of Retaining Quality Employees • Seek employee input to determine feeling about such topics as: – Work environment – Opportunities for advancement – Firm’s compensation system – Their supervisor – Training and development opportunities Copyright © 2014 Pearson Education, Inc 13-44 Advance Notice of Resignation • Two weeks notice • Communicate policy to all employees • May pay employee for notice time and ask him/her to leave immediately Copyright © 2014 Pearson Education, Inc 13-45 Offboarding • Involves exit interviews, removing access to company property, and other services involved in workers leaving the company • Numerous risks in termination process • Important to establish fair and uniform process as employees leave company Copyright © 2014 Pearson Education, Inc 13-46 Retirement Many long-term employees leave organization through retirement Copyright © 2014 Pearson Education, Inc 13-47 Phased Retirement • Any arrangement that allows employees to move from full-time work to no paid work in stages • More likely to be used among consulting firms, educational institutions, health care, private practice, wholesale/distribution, and other similar organizations • Pension Protection Act permits limited phased retirement by allowing in-service pension plan withdrawals to begin at age 62 rather than 65 Copyright © 2014 Pearson Education, Inc 13-48 A Global Perspective: Administering Disciplinary Action in the Global Environment • Moving into international arena, often presents different disciplinary action situations • Much harder to terminate person in Europe than in North America • Difficult for global company to establish standardized policy on disciplinary action Copyright © 2014 Pearson Education, Inc 13-49 Copyright © 2014 Pearson Education, Inc 13-50 [...]... © 2014 Pearson Education, Inc 13- 35 Ombudsperson • Complaint officer with access to top management • Hears employee complaints, investigates, and recommends appropriate action • Impartial, neutral counselor who gives employees confidential advice • Typically independent of line management and reports near or at top of organization Copyright © 2014 Pearson Education, Inc 13- 36 ... to company policies Copyright © 2014 Pearson Education, Inc 13- 13 The Disciplinary Action Process EXTERNAL ENVIRONMENT INTERNAL ENVIRONMENT Set Organizational Goals Establish Rules Communicate Rules to Employees Observe Performance Compare Performance with Rules Take Appropriate Disciplinary Action Copyright © 2014 Pearson Education, Inc 13- 14 Disciplinary Action • Word discipline comes from word disciple... Pearson Education, Inc 13- 15 Approaches to Disciplinary Action • Hot stove rule • Progressive disciplinary action • Disciplinary action without punishment Copyright © 2014 Pearson Education, Inc 13- 16 Hot Stove Rule • • • • • Burns immediately Provides warning Gives consistent punishment Burns impersonally Problem: All situations are not the same Copyright © 2014 Pearson Education, Inc 13- 17 Progressive... agreement Copyright © 2014 Pearson Education, Inc 13- 27 Demotion as Alternative to Termination • Demotions may be used as alternative to discharge • Process of moving worker to lower level of duties and responsibilities, usually involving reduction in pay • Usually spelled out clearly in the labor management agreement Copyright © 2014 Pearson Education, Inc 13- 28 Downsizing • Also known as restructuring... Inc 13- 11 Discipline and Disciplinary Action • Discipline: State of employee self-control and orderly conduct • Disciplinary action: Invokes penalty against employee who fails to meet established standards Copyright © 2014 Pearson Education, Inc 13- 12 Effective Disciplinary Action • Addresses employee’s wrongful behavior, not employee as a person • Should not be applied haphazardly • Not usually management s... agreement • Nonunion workers can generally be terminated more easily Copyright © 2014 Pearson Education, Inc 13- 25 Termination of Executives • • • • • • Economic Reorganization Downsizing Philosophical differences Decline in productivity No formal appeals procedure Copyright © 2014 Pearson Education, Inc 13- 26 Termination of Middle- and LowerLevel Managers and Professionals • In past, most vulnerable and... Copyright © 2014 Pearson Education, Inc 13- 21 Disciplinary Action Advice • Managers often avoid disciplinary action, even when it is in company’s best interest • Many supervisors may be too lenient early in disciplinary action process and too strict later • Proper time and place to administer disciplinary action is crucial Copyright © 2014 Pearson Education, Inc 13- 22 Trends & Innovations: Emotional... organization shrink for purpose of improving organizational performance Copyright © 2014 Pearson Education, Inc 13- 29 System Used in the Event of Downsizing • Unionized: Seniority is usually the basis • Nonunion: Productivity is the primary factor Copyright © 2014 Pearson Education, Inc 13- 30 Negative Aspects of Downsizing • Natural grieving period; desire to go back to way things used to be • Layers... be in line for layoffs Copyright © 2014 Pearson Education, Inc 13- 31 Negative Aspects of Downsizing (Cont.) • • • • Employee loyalty significantly reduced Institutional memory lost Remaining workers required to do more When demand for products or services returns, firm may realize it has cut too deep Copyright © 2014 Pearson Education, Inc 13- 32 Worker Adjustment and Retraining Notification Act (WARN)... benefits for up to 60 days Copyright © 2014 Pearson Education, Inc 13- 33 Outplacement • Laid-off employees are given assistance in finding employment elsewhere • Companies use outplacement to take care of employees by moving them successfully out of company • Firm tries to soften the impact of displacement Copyright © 2014 Pearson Education, Inc 13- 34 Severance Pay • Compensation designed to assist laid-off ... competitor and remaining with firm Copyright © 2014 Pearson Education, Inc 13- 4 Internal Employees Relations Defined Human resource activities associated with movement of employees within firm after... Inc 13- 5 Internal Employee Relations Activities • • • • • • • • Discipline Termination Downsizing Demotion Transfer Promotion Resignation Retirement Copyright © 2014 Pearson Education, Inc 13- 6... Pearson Education, Inc 13- 12 Effective Disciplinary Action • Addresses employee’s wrongful behavior, not employee as a person • Should not be applied haphazardly • Not usually management s initial